Tax policy and administration can be complicated, but they are a reality for government services, businesses and taxpayers. Therefore it is important for citizens to develop an understanding of tax codes and how they affect them.
A joint conference hosted by the Drexel School of Economics and Econsult Solutions, Inc. on April 27 focused on economists helping citizens do just that.
The conference was attended by students, faculty, business leaders and government officials and offered presentations focused on demystifying complex tax policies and myths. It consisted of a keynote and two panel discussions with the goal to “elevate the public discussion around tax policy,” as stated by keynote speaker James Hines, PhD.
Hines, professor of law and economics at the University of Michigan, spoke about the mistakes people make when looking at taxes and competition. For example, many people try to oversimplify the complex and interconnected nature of the tax system by believing international tax decisions don’t affect the US economy. But in reality, all tax decisions and policies have an impact on the municipalities around them.
One of those decisions discussed at length was tax incentive policy. Hines, and later Daphne Kenyon, PhD, of D.A. Kenyon & Associates, discussed how governments can use tax incentives for businesses in a way that will benefit economic growth. They believe they can only be effective if governments are careful in how these are provided to business and focus more on ensuring the positive economic impact intended by implementing them.
As part of another panel on tax administration, Marissa Waxman, deputy commissioner of policy and analysis for the City of Philadelphia, brought the issue a bit more local. She spoke about the complexity of not just policy but the administration of taxes in Philadelphia.
Using behavioral economics, a marriage of economics and psychology, Waxman’s team has identified ways to better inform Philadelphia residents about and encourage the payment of taxes. They tested different forms of communication and messages to develop insight into the best way to communicate with city taxpayers and clarify the confusing nature of its tax policy.